A welcome boost for renewable heat

Launching in April 2011, the Renewable Heat Incentive (RHI) is the first scheme of its kind in the world to provide financial support for householders, businesses and organisations who install sources of renewable heating, including heat pumps and solar thermal water heating.

While “feed in tariffs” such as the new Clean Energy Cashback scheme are already in place in many countries, these focus on local electricity generation and feedback to the grid, rather than the direct harvesting of heat from renewable sources. The new RHI scheme has the potential to be a real boost for the uptake of renewables such as heat pumps and solar hot water in the UK, and will make an important contribution towards meeting the government’s targets on carbon emissions.

According to the Department of Energy and Climate Change (DECC), the RHI will increase financial support previously available through grant schemes such as the Low Carbon Buildings Programme.

While final details are still to be confirmed following a recent Government consultation, the proposed tariffs are intended to bridge any financial gap between the cost of conventional and renewable heat systems at all levels, plus an investment rate of return of up to 12%. The rate and duration of proposed tariffs vary according to the technology employed and size of installation.

Small installations:

Technology

Scale

Ground source heat pumps Up to 45kW

Air source heat pumps

Up to 45kW Solar Thermal Up to 20kW

Proposed tariff (pence/kWh)

7.0 7.5 18

Tariff lifetime (years)

23 18 20

Medium installations:

Technology

Scale

Ground source heat pumps 45 – 350kW

Air source heat pumps

45 – 350kW Solar Thermal 20 – 100kW

Proposed tariff (pence/kWh)

5.5 2.0 17

Tariff lifetime (years)

20 20 20

For small and medium sized installations, tariff rates will be “deemed”, based on a calculated building heat load and assumed efficiency from the renewable heating system. Dimplex hopes to see improved tariffs for heat pumps able to demonstrate higher efficiencies rather than the current flat rate for all products and is also lobbying for improved rates for both medium and large heat pump installations.

Under the currently published tariff rates, domestic users could typically expect the following levels of payback: Based on a 3 bedroom detached property, with a floor area of 104m2

, annual space heating load of 16,000kWh and annual domestic hot water load of 3600kWh*

Illustrative annual fuel cost savings – Ground source heat pump – SI 11 MEH

Gas boiler

GSHP + UFH/

(85% efficiency) Typical annual

running costs*:

£1066 per year

SmartRad + DHW

Typical annual running costs*:

£619 per year

Annual fuel saving vs gas:

£447/yr

RHI contribution: £1379/yr

Total benefit: £1826/yr

GSHP + radiators + DHW

Typical annual running costs*:

£833 per year

Annual fuel saving vs gas:

£233/yr

RHI contribution: £1379/yr

Total benefit: £1612/yr

Illustrative annual fuel cost savings – Air source heat pump – LA 11 MS

Gas boiler

ASHP + UFH/

(85% efficiency) Typical annual

running costs*:

£1066 per year

SmartRad + DHW

Typical annual running costs*:

£699 per year

Annual fuel saving vs gas:

£367/yr

RHI contribution: £1395/yr

Total benefit: £1762/yr

*Based on building information provided in the DECC RHI consultation. For more information on the Renewable Heat Incentive visit www.decc.gov.uk.

Renewable energy finance scheme

Dimplex can now offer Renewable Energy Finance, a scheme designed to overcome budget restrictions and spread the costs of the full installation of renewable energy systems.

Ideally it allows the investment costs to be re-paid over a period of years and the savings in energy costs provided from the heat pump – once installed – can also be used to part fund the scheme.

The scheme opens up the possibility of energy efficient heating to more local authorities, schools and housing associations as the initial capital investment of an installation can be spread up to a maximum of 15 years. Essentially this allows projects aimed at tackling issues such as Decent Homes and fuel poverty to be accelerated; while funding schemes such as the Low Carbon Buildings Programme and CERT are still available and overcome the traditional constraints of having to work within limited annual capital budgets.

The scheme can provide match funding in association with grant schemes or provide 100% project funding where grants aren’t applicable. It covers the complete project costs so there is no up-front capital outlay and there are flexible payment schedules and accounting structures to meet individual client needs.

The whole heat pump or solar thermal system can be funded, including consultancy, installation and commissioning as well as groundworks, all renewable equipment and the heat distribution system. Bespoke agreements to suit individual clients’ requirements will be considered by the Dimplex renewable energy scheme. The scheme can also offer deferred payment options to ease current budget constraints.

Latest news – LCBP2 Funding extended

IT’S ALL CHANGE ONCE AGAIN for the Low Carbon Buildings Programme Phase 2 (LCBP2), with the scheme now extended for renewable heating technologies until 2011.

As one of only three Framework Suppliers selected to supply heat pumps under the original LCBP2 scheme, Dimplex has already supplied systems for over 200 projects and accessed over £4.5m in grant funding for schools, housing associations, charities and other not-for-profit organisations.

The new “extended” scheme (LCBP2E) saw a further £35m added for public sector projects in July 2009. It also expanded the scope of available technologies to include air source heat pumps (those included on the Microgeneration Certification Scheme), meaning the new Dimplex LA TU air source range is now eligible for LCBP2E support. Another welcome change is an increase in the maximum fundable installed capacity to 300kW(th). Also under the updated scheme, Dimplex solar thermal products are now eligible for 50% grant funding for public sector and not for profit organisations.

While funding for heat pumps, solar hot water and other renewable heat technologies will remain available until the introduction of the Renewable Heat Incentive in Spring 2011 (or at least until remaining grant funds are exhausted), an obligation of the scheme is that all grants offered must be claimed by February 2011, so public sector bodies wishing to take advantage

of 50% grant funding will need to move quickly in order to secure funds and complete installations in time.

For more information on LCBP2E or to discuss an LCBP2E project, call 0800 023 2243 or email lcbp@dimplex.co.uk.

ASHP + radiators + DHW

Typical annual running costs*:

£942 per year

Annual fuel saving vs gas:

£124/yr

RHI contribution: £1395/yr

Total benefit: £1519/yr

HAILEYBURY COLLEGE – HERTFORDSHIRE

The Governors opted for a heat pump solution for a new build languages facility, combined with underfloor heating and passive

cooling. Dimplex Installer Partner, Ecovision advised that a

Dimplex ground source heat pump would provide a low- maintenance, high-performing

and highly reliable heating system to ensure the lowest possible expenditure. Ecovision also helped the school to obtain 50% grant funding for the project.

RNLI LIFEBOAT STATION, WIRRAL

A new build lifeboat station at

Hoylake, on the Wirral is heated by a Dimplex SI 9 MS ground source heat pump linked to a buried ‘slinky’ heat collector,

which was installed by Dimplex Installer Partner Earth Energy. As the structure is located right at the water’s edge, the collectors are laid under the tidal area, a highly

efficient means of transferring environmental heat.

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